If Spain's banks collapse, UK may send in Navy to save ex-pats

The Foreign Office says it will bring stranded ex-pats home using ships, planes and coaches

THE GOVERNMENT is drawing up emergency plans to evacuate British ex-pats from Spain and Portugal in the event that the Iberian countries' banking systems collapse, raising the prospect of Royal Navy ships bearing down on the Costa del Sol to rescue well-tanned retirees.

Ships, planes and coaches could be sent to bring home Britons who find themselves unable to withdraw money to pay for basic needs or travel home because of a Spanish or Portuguese banking crisis, while diplomats scramble to get special treatment for ex-pats from local banks.

According to The Sunday Times, the Foreign Office and the Treasury have both been drawing up contingency plans after credit rating agency Standard & Poor's last week downgraded the status of ten Spanish banks.

The agency put some Spanish banks, including Banco Popular, on "credit watch with negative implications" suggesting it expects to lower their status further still. Another agency, Fitch, warned yesterday that a solution to the euro crisis was probably "beyond reach".

A Foreign Office source told the Times his department would draw on its experience of withdrawing ex-pats from foreign conflict zones – such as the 2006 evacuation of Britons from Lebanon using Navy warships.

The Treasury, meanwhile, would ask Spanish banks not to call in mortgage loans from British ex-pats leading to their homes being repossessed. Many Britons live in Spain on very low incomes, having retired there.

As well as evacuating ex-pats, the Foreign Office is planning a fund to make small loans to Britons who find themselves in need. The Treasury will also ask Spanish banks to allow Britons access to their finances even in the event of a collapse.

The paper quotes a Foreign Office source as saying: "The nuclear scenario would be having thousands of Brits stranded at the airports in Spain and Portugal with no way to get money from the cash dispenser and no way to get home.